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SaaS Pricing: Unlimited vs Per User

Cloud computing created many disruptions. With accessible data, new services and new types of connected devices emerged. Software-as-a-Service (SaaS) business models grew out of cloud computing’s rise – leveraging on-demand software, scalable to accommodate many concurrent users.

SaaS pricing models are based on pre-cloud “in-the-box” software pricing. Most SaaS providers still charge customers on a per-named-user basis: more users = more expense. Until now. Gartner’s recent SaaS study outlines a change in SaaS pricing models. By 2025, 40% of software currently priced per-user is expected to transition to other pricing models, such as unlimited users or tiered pricing based on consumption – according to Gartner.

Why the change?

Per-user pricing works for some industries where only a small number of users need to access information or for essential services. However, for information-sharing platforms (collaboration, innovation, CRM), per-user pricing is the antithesis of widespread adoption. Meaning the more users, the greater the chance of success. This is due to several reasons:

information is shared – not siloed

data is up-to-date

high internal engagement leads to better outcomes

SaaS was born out of a rebellion against in-the-box software – think Salesforce’s “No Software” beginnings. Now is the time for the next rebellion: No User Pricing.

What’s next?

The change from per-user to per-company pricing will be slow and nuanced. SaaS providers will bridge the shift with tiered user pricing; pricing per division; and other gimmicky ways to restrict usage.

At SwitchPitch, we are ahead of the curve. We see the value in innovation collaboration and are passionate about enterprise + startup engagement. Engaging as many corporate users as possible – rather than limiting users – ensures the greatest outcomes for our clients and their startup partners.